Carbon Farmers of Australia Blog

The Gillard Government has announced a $1.3bn package of assistance to Agriculture under the Carbon Tax. This is how the Government announced it. [Our observations in brackets.]

Boosting wider land action

The Government will purchase carbon credits through the Carbon Farming Initiative non-Kyoto Carbon Fund. This $250 million program over six years will create incentives to undertake land-based action such as the storing of soil carbon, revegetation and forest conservation. [This is a blatant adoption of the Opposition's Direct Action approach for agriculture. It was an initiative promoted by Senator Christine Milne in the Multi-Party negotiations.]

Credits from these projects can also be sold to companies wanting to offset their carbon pollution to meet voluntary commitments to carbon neutrality. [These offsets still have to meet the stringent Kyoto requirements which are enshrined in the Carbon Farming Initiative Integrity Standards].

Australia will continue working to develop new international rules that recognise a wider range of action to reduce pollution on the land. In
future, this may allow landholders to sell credits from a wider variety of projects to companies with obligations under the carbon price. [Australia is campaigning to haveArticle 3.4 of the Kyoto Protocols repealed because they block the sale of agricultural offsets on the international compliance market. They force nations wishing to report their agricultural emissions to include non-man made emissions such as those caused by drought or fire.]

Conservation tillage

The Carbon Farming Futures program will include specific support for conservation tillage equipment. This will be delivered by a 15 per cent refundable tax offset for eligible equipment. This will incentivise farmers to move to zero till and minimum tillage farming techniques which can enhance soil carbon, water retention and productivity. [This was an initiative promoted by Tony Windsor MP in the Multi Party Negotiations.]

Farmers will be required to participate in research and methodology development to assist efforts to settle methods for crediting soil carbon under the Carbon Farming Initiative. [A 15% refundable tax offset will not be enough to turn a conviction deep cultivator into a zero-tiller. We need carbon offsets for zero till, which will require abandoning the Additionality Principle.]

Carbon Farming Futures

The Carbon Farming Futures program will deliver $429 million over six years to help farmers and other landholders benefit from financial opportunities under the Carbon Farming Initiative:

• support will be provided for research to investigate new ways of storing carbon and reducing emissions in the land sector, including biochar and biofuels
• this ongoing program will support landholders to take action such as testing new ways to increase soil carbon and reduce emissions
• new funding will be made available to test more effective methods for measuring carbon stored in soils and to integrate carbon farming into everyday farm business
• extension officers and outreach activities will give landholders access to information to help them benefit from carbon farming.

This is fantastic news because Minister Combet told us there was no more $$$ for research after the $25m Soil Carbon Research Program ran out next year. Rob Oakshott and Tony Windsor gave strong voice of asupport for soil carbon during the negotiations. However, more funds should not be an excuse for delaying action on trading. The sooner we can get the highest number of farmers sequestering carbon the better. The next drought is coming.]

The ongoing Biodiversity Fund has been allocated $946 million over the first six years of the program and will support projects that establish, restore, protect or manage biodiverse carbon stores. Funding will be provided for establishing mixed species plantings in targeted areas, such as areas of high conservation value including wildlife corridors, riparian zones and wetlands. [A billion dollars for planting trees? It seems the Greens drove a hard bargain. There are ways to use trees that increases the productivity of farms and ways that do not. Note well.]

The Fund will also support action to prevent the spread of invasive species across connected landscapes and the management of existing biodiverse carbon stores. This includes land already under conservation covenants, subject to land clearing restrictions, and publicly owned native forests

Regional Planning for Climate Change

Regional Natural Resource Management (NRM) organisations are well placed to help plan for climate change and to maximise the social and environmental benefi ts of carbon farming projects. Around $44 million over five years will go to make regional NRM plans climate-ready. This will include funding to develop detailed scenarios on climate change impacts on a regional level. The plans will guide where biosequestration projects should be located in the landscape. This whole of region approach will help to maximise the benefits for biodiversity, water and agricultural production. The plans will provide an assessment of how projects can maximise landscape resilience, improving each region’s ability to tackle and adapt to Australia’s changing climate.

[This is disturbing and could have fatal consequences for soil carbon and sequestration.The market does not need more regulation and bureaucracy . The soil carbon offset is something that is hard enough to sell to farmers as it is without the intrusion of environmental agencies telling farmers where they can establish projects and how to run them. It could scare farmers off.]
[Over the coming days we will seek more detail from the Government.]

The Potential of Australian Farmers to Earn Income from Soil Carbon Sequestration has been estimated at unrealisticially low levels. The peer-reviewed science fails to replicate what farmers can achieve because it studies only monopractice (single practice change), it does not study polypractice (multiple practice changes) which is the real-world behaviour of farmers seeking to enrich their soils and increase their soil carbon levels.

The highest level of increase recorded by scientists studying monopractices is 0.5 tonnes of carbon. Experienced carbon farmers using multiple land management changes have recorded 30 tonnes and more per year for 10 years.

These tonnages are not recognised by government scientists because they have not studied it and have no plans to study it. Officially they don't exist. The studies, when they take place, can take up to 5 years. Years can pass before funding is available, then three year field trials, followed by a year getting the results published in an academic journal before it can be considered 'sound science'.

The Wentworth Group of Concerned Scientists have declared that there is no peer-reviewed science that reveals the potential of carbon farming for soil carbon sequestration. They are right. Public policy has not been informed by knowledge of the existence of the Hidden Tonnes of Soil Carbon.

Carbon farming income as much as $100g per year

The Gillard Government’s announcement of a price for Carbon is welcomed by the Carbon Farming & Trading Association. It is good news for farmers because they can make additional income. Farmers can be paid the carbon price for reducing their emissions or capturing and storing carbon in soils and trees. The Carbon Farming Initiative legislation is complementary to the Carbon Tax legislation and is in the final stages of being passed through the Senate. “Farmers stand to make significant additional income if they take maximum advantage,” says Michael Kiely, Chairman of the Carbon Farming & Trading Association. “If soil carbon CO2 offsets fetch $23 a tonne, our best carbon farmers could make more than $100,000 a year at the top end of estimates.”*

“Add to that offsets earned for reducing methane from animals, reducing nitrogen emissions from animals and fertiliser, removing feral animals, planting native forests, reducing burning stubble and grasslands, etc. and there are many opportunities in prospect for farmers.”

These opportunities will be revealed at the Carbon Farming Conference in Dubbo NSW on 28-29 September, 2011.

*Leading carbon farmers report increases in soil carbon of 2% in a decade: 0.2% @ 30cms @ Bulk Density 1.0: 22tCO2-e/Ha/yr @ $23/t: $506/Ha. For 200Ha: $101,000. (NB. $23/t is the price to apply in the Compliance market. Soil carbon will initially be traded in the Voluntary market, price estimated at $10-15/tCO2-e, but the pathway to the Compliance market is anticipated by the Carbon Farming Initiative. For a more conservative estimate, simply halve the price and the resulting income. Note the above calculation based on 200Ha. Average farm size 800Ha. Note that the price on carbon will rise in the coming decade.)

I want to again highlight some of the evidence that the committee heard and the committee's recommendations, and then seek the minister's response. We heard from Carbon Farmers of Australia and the Carbon Farming and Trading Association who claimed:... the •business as usual‘ rule, which penalizes Landcare farmers and other progressive landholders who have taken up carbon farming techniques early and—potentially—rewards laggards who continue to degrade their soils. The association described this treatment of progressive farmers as 'the ultimate perverse outcome'. They stated: The impact of that is that there will be property not under contract for carbon farming. By that I mean that these progressive farmers will eventually sell out or pass the farm on and there is no guarantee that that regime will continue. We believe that people would not desecrate a carbon rich environment because of the obvious value of such a thing, but it is not guaranteed.

The Government's solution to the absurd Financial Additionality Rule could see farmers forced to fill out forms every year to report on their farming practices, whether they are involved in the Carbon Farming Initiative or not.

A "Common Practice" test is used to replace the Financial Additionality provision, which excluded a project if it resulted in higher production and hence higher profits - which it is assumed should be enough to get farmers to change their practices. (Soil carbon cannot be increased without increasing biomass and hence production. Yet the majority of farmers still don't practice soil-carbon-friendly farming.)

Replacing Financial Additionality rule is the Common Practice rule which holds that a farming practice qualifies as "Additional" if it is not common practice in its industry, part of its industry or in the type of environment in which the farmer is working.

If it is not common practice it goes on the "Positive List". Who decides what’s on the list? The Minister. How will he do this? The common practice test can only be applied if there exists accurate statistics of farm practices in every locality, parish and district across Australia. As this data does not exist, a major data gathering exercise or census will be required, involving a compulsory survey to be filled in by every landholder, even those not wishing to involve themselves in the CFI. The resulting database will need to be kept up to date, so farmers could find themselves filling in forms every year.

It is variously estimated that there are between 100,000 and 180,000 agricultural enterprises in Australia. The response rate to such a survey would need to be close to 100% to give confidence in the decisions taken about common practice. At the same time, there needs to be precise definitions of farm practices that take into account the variants of those practices. There will need to be some way of deciding when a variant is far enough removed from the original practice to be considered a new practice. For instance there are no clear boundaries separating no-till from zero-till, minimum-till, direct drill, pasture cropping, no-kill/no-till and other alternative forms of cultivation. There will need to be a statistical cut off point that acts as the boundary beyond which a practice is ‘common practice’. That boundary point, wherever it is chosen to be, will be arbitrary and a source of injustice.

The levels of complexity grow exponentially when the project must be measured against the others in the farmer’s industry or part of the industry and type of environment. Who decides what is a part of an industry and what isn’t? And type of environment? Once on the Positive List a practice is not guaranteed to stay there. Regular reviews of the ‘common practice’ situation will need be conducted to decide who stays and who goes. Who decides who stays on the list? The answer to that question every time is “The Minister”. In no other market is a Minister so actively engaged in regulating daily activity, not even the Treasurer. While the goodwill and good intentions of the current incumbent are unquestioned, a future minister may not be so disposed.

The Carbon Farming & Trading Association recommends that the Common Practice Test be abandoned and “Additional” redefined as applying to all sequestration effected from the date that a baseline is established.

The new Carbon Farming Law will be explained at the Carbon Farming Conference & Expo, 28-29 September, 2011

The Senate is debating the Carbon Farming Initiative legislation. Three senators quoted our evidence before the Senate Inquiry during the debate so far, so the voices of carbon farmers was heard: Senator Richard Colbeck (Liberal, Tasmania)

5 July 2011

I want to move on to the issue of permanence. It is a complex issue and one that needs modification as part of this legislative process. It is interesting that some farmers who came in to talk to us, who are all about storing carbon in their landscape, brought in to us presentations demonstrating how they were changing their farming methodologies to store carbon in their landscape. They talked about the improvements in productivity. They discussed with us the carrying capacity of their land as a result of their different management practices. And yet Mr Kiely, who came before the committee to give us evidence, says that permanence is 'the deal killer'. He said: No farmer would be silly enough to agree to 100 years for soil carbon or 100 years for anything. A finance lender would want to know seriously the impact on the value of the property of agreeing to such a thing. We did some research into the 100 years thing and discovered it was a policy decision, not a scientific measure … These are people who are committed to carbon storage, who are practising the sorts of things the government wants to encourage, and they are saying that the government processes are a 'deal killer'. And these are the sorts of people who the government should legitimately be listening to as part of this process. It is only common sense that practitioners, who have spent time and effort in trying to develop their farms and who actually practice these things, and have some expertise, should be listened to by the government.

Senator Nick Xenaphon, Independent, South Australia

6 July, 2011

'Permanence' is defined in the act as '100 years'. On the face of it, that gives a great deal of confidence. But it is
not realistic in the context of farming practices and it is not realistic in getting a good outcome. Let me quote from page 35 of the Senate committee report. The Chairman of the Carbon Farming and Trading Association, Michael Kiely, said:

No farmer would be silly enough to agree to 100 years for soil carbon or 100 years for anything. A finance lender would want to know seriously the impact on the value of the property of agreeing to such a thing. We did some research into the 100 years thing and discovered it was a policy decision, not a scientific measure ... That is a real concern. We need to listen to key stakeholders such as the CFTA. It would be foolish not to listen to those who have that firsthand practical knowledge. This was a recommendation about the issue of permanence in the inquiry into these bills. It is important that the DOIC continue to update, amend and improve the scheme into the future.

Senator Simon Birmingham, Liberal, South Australia

The CFTA appeared before the inquiry and described the provision as the 'deal killer'. I will read an extract of the evidence that is highlighted in the inquiry. Mr Michael Kiely, Chairman of the CFTA, stated: No farmer would be silly enough to agree to 100 years for soil carbon or 100 years for anything. A finance lender would want to know seriously the impact on the value of the property of agreeing to such a thing. We did some research into the 100 years thing and discovered it was a policy decision, not a scientific measure ...We believe that 100 years is a perverse outcome. The result is said to be necessary so buyers can be confident they are getting value—that is, genuine abatement—so they get nothing. There is nothing available for them. We have found examples where the IPCC and the Verified Carbon Standard have allowed other periods of time recently—20, 25, 30-odd years. We believe we could work within that sort of time frame.

Opportunities in the Carbon Farming Initiative will be revealed at the

Carbon Farming Conference & Expo, 28-29 September, 2011

Listening to the Senate debate on the Carbon Farming Initiative... the Minister for Agriculture who has carriage of the matter in that House had some trouble answering questions about how Common Practice will be assessed (a mixture of stakeholder consultation, surveys and 'common sense') during attempts by Opposition, Greens and Independent Nick Xenophon to have amendments accepted and left the Chamber during a break in proceedings, leaving it to a junior minister (Evans) who clearly had trouble and who called on another senator (Feeney) to explain why the amendments were unacceptable.

No reflection on Senator Ludwig, of course.

CFI is hard to understand and he has the cattle industry screaming for his blood because it was caught out running a sloppy supply chain operation and left itself exposed to a PR disaster and the industry blamed everyone but itself - especially the government for responding to the will of the people and shutting down the supply chain until the industry cleaned up its act. The board of the MLA should consider its position - it has had several previous incidents that should have indicated the type of crisis it is likely to encounter and it should have directed senior management to develop a Crisis Management Plan like any other business or industry. (Woops! We know where Joe was this afternoon, reintroducing cattle trade...:)

 

 

Opportunities in the Carbon Farming Initiative will be revealed at the Carbon Farming Conference & Expo, 28-29 September, 2011

There is a disconnect between cause and effect in the Alice In Wonderland world of the Carbon Farming Initiative. The purchase of offsets is assumed to be a strictly limited, one dimensional transaction in which the buyer is interested only in ‘genuine abatement’ as dictated by the narrowly-focussed Kyoto Protocol.

The purpose of the CFI is to get broad involvement among farmers in abatement activities to take advantage of the vast acreage of Australia’s farming and grazing lands to help meet the global community’s goal of less that 2°C increase in global mean temperature. The term ‘board involvement’ should be defined in terms of the needs of the objective – which is to have the largest number of farmers possible sequestering and avoiding as much carbon emissions as possible as soon as possible and for as long as possible.

In the voluntary market at least buyers are free to respond to such a proposition. Whereas in the compliance market it is a strict accounting exercise, based on national targets, the voluntary market can entertain such concepts as ‘a hectare that is not under contract for sequestration is not secured as part of the national effort’. It is also not guaranteed to be part of the regeneration of soil health and biodiversity in farm landscapes.

 

 Opportunities in the Carbon Farming Initiative will be revealed at the Carbon Farming Conference & Expo, 28-29 September, 2011

To make it easier for farmers to find their way through the thicket of tests that stand between their desire to take part in the Carbon Farming Initiative and actually doing it, the Government has established 2 lists: a Positive List of activities that are automatically approved and for which there are methodologies ready for use; and a Negative List of activities that are automatically excluded. There is a major distortion in the ease of making its way onto the Positive List for an activity that involves emissions avoidance vs the difficulty facing a sequestration activity. It is a distortion based on a misunderstanding of the nature of abatement.

Whereas an offset created by renewable energy such as biomass as fuel stock or the energy created in the biochar process can be equated easily to tonnes of CO2 emissions avoided by substitution of a tonne of coal burned, there is no guarantee that the tonne of coal not burned today will not be mined and burned tomorrow. As such, given the world’s appetite for coal, the Permanence of such an offset is far less secure than soil carbon’s stable fractions. Yet the 100 Year Rule is not applied in one case and is applied in the other.

Similarly, an offset created by any one of a number of practices that cause ruminants to emit less methane will find it easier to achieve Positive status than the process of sequestration which – as part of the farm carbon cycle that produced the methane and is reprocessing it back into vegetation, food and soil – is not recognized for the role it plays. Methane emissions are treated as a simple zero-sum calculation whereas its production and sequestration is far more complex while soil sequestration is damned with unmanageable complexity when it is in fact a simple, predictable process.

Access to the Positive List is easy for avoided emissions because policymakers have accepted an unjustifiably simplified notion of how these abatements operate.

Opportunities in the Carbon Farming Initiative will be revealed at the Carbon Farming Conference & Expo, 28-29 September, 2011

FARM A – Degraded soils due to decades of ‘flogging’ the paddocks. Farmer signs a soil carbon contract and introduces new practices that capture Carbon.

FARM B – Soils recovering after 10 years of carbon farming. Farmer forced by terms of trade to sell property. New owner refused access to CFI contract. Introduces ‘flogging’ regime for paddocks. Sequestration ceases.

Opportunities in the Carbon Farming Initiative will be revealed at the Carbon Farming Conference & Expo, 28-29 September, 2011